VEVEY, Switzerland — Nestle SA's ambition to consolidate its 25 billion Swiss francs ($20.43 billion) in global pension assets took another giant step forward on Jan. 1 with the launch of Nestle Capital Advisers, a one-stop shop for the company's 280 plans worldwide.
The new Swiss-based subsidiary combines all of Nestle's existing pension-related administrative and financial management operations. The unit also includes Nestle Capital Management, a new in-house fund manager based in York, England, with £4.3 billion ($8.4 billion) in assets under management for Nestle's non-U.S. pension plans. Nestle's $2.4 billion in U.S. defined benefit assets are not managed by NCM.
The key to NCA's success will be its ability to extract economies of scale and to better monitor global pension plans by sharing administrative services, financial reporting, risk management and performance measurements, among other services.
"Before, we were somewhat talking to each other, but we were really running on parallel courses," said Jean-Pierre Steiner, chief executive officer of Nestle Capital Advisers. "What we've done is to basically merge the operations so that we can all focus on the same goals."
Nestle — which is among the pioneers in cross-border pension pooling, having begun its first fund in 2001 — has continued to make strides in unifying its pension management services while preserving local independence among individual plans. Local trustees retain the power to decide whether they want to allocate assets to Nestle's investment team or use an external manager. As of Dec. 31, 2005, the company oversees almost $17 billion in non-U.S. pension assets.